In an interview with valdaiclub.com for its Eastern Perspective project, Glenn Diesen, Professor at the Higher School of Economics, shares his vision of China’s motives and objectives in the implementation of large-scale infrastructural initiatives in Eurasia. The Asian giant’s aspiration is to climb up global value chains and contest US control over the geoeconomic levers of power, he believes.

China, under Xi Jinping, has made a claim for global leadership putting forward a number of ambitious projects for reorganizing Eurasia. What prompted this shift toward a more active role? What are China’s motives and objectives?

China developed since the 1970s under the model of a “peaceful rise,” which entailed internal development without attracting attention and stoking fear among other great powers. This enabled rapid industrial development while its investments in US debts moderated Washington’s preparedness to confront China. Yet, the “hide your strength, bide your time” strategy was inherently a temporary strategy as Washington grew incrementally worried about the future intentions of an increasingly powerful China. As its economy grew, China came under greater pressure to secure reliable access to energy resources and transportation corridors to mitigate the vulnerability of being dependent on the benign intentions of the US. The interdependence between the US and China was also unsustainable due to the trade gap – characterised by China’s dependence on exports to the US, and US reliance on China to fund its growing deficits. Eventually, neither the US nor China were comfortable with the huge debt. Furthermore, China’s low-wage export-based development strategy has been exhausted due to shrinking rates of migrant workers from the countryside, untenable environmental degradation, and the unpopular suppression of domestic consumption and standard of living to maintain low-cost manufacturing as a comparative advantage.

The motivation and objective of China is to climb up global value chains and contest US control over the geoeconomic levers of power. In other words, China has replaced the “peaceful rise” with the objective of reorganising Eurasia towards China. This objective is pursued with a three-pillared approach: The first pillar is developing strategic industries by asserting leadership over the top technologies of the new industrial revolution, such as the 5G network and automated manufacturing, to ensure that Eurasia integrates under Chinese technological ecosystems. The second pillar is the establishment land- and maritime transportation corridors to physically integrate Greater Eurasia. The third pillar is the construction of new financial and economic instruments such as new economic blocs, investment banks, transaction system, trade/reserve currencies etc.

“Hide your strength, bide your time,” Deng Xiaoping used to say. In recent years, China has become increasingly vocal on the world stage. Has its historical moment come? Many observers believe that by means of its Belt and Road Initiative China is remaking Eurasia to serve its goals. Valdai Club experts explain whether this is true and if China’s interests can be aligned with those of its neighbours.

What is the Belt and Road Initiative about? What are the pros and cons of the developing countries’ cooperation with China? Can the Chinese initiatives be compared to the Marshall Plan?

The Belt and Road Initiative aims to enhance the world’s economic connectivity with a rapidly growing China. The massive infrastructure investments of China provide developing countries with both opportunities and threats. Much like the Marshall Plan, these investments can spur economic growth but also integrate these countries into an asymmetrical interdependent partnership. Furthermore, accepting huge Chinese investments and loans can be hazardous if these infrastructure projects do not create a return on investment. Case in point, Sri Lanka had to hand over its Hambantota port has raised concerns about predatory lending.

What countries of Eurasia are positive about China’s initiatives and which ones are wary about them? Why?

The main variable that explains the variability of attitudes towards China’s initiatives is the geoeconomic implications. The principal geoeconomic implications derive from China’s intentions to integrate Greater Eurasia as a multipolar construct to repudiate US attempts to sustain the unipolar moment. The main opponent to China is therefore the US and its allies such as Japan that have vested interest in perpetuating the Western-centric status-quo by advancing an Indo-Pacific concept to rival Greater Eurasia. India’s initiatives for Eurasian integration are less compatible with China, which is also creating incentives for India to balance Greater Eurasia by also cooperating with the Indo-Pacific Region. Europe is also divided on the issue as Eurasian integration offers significant economic opportunities, yet it entails supporting China’s geostrategic ambitions to convert Europe into the Western periphery of Greater Eurasia. In contrast, Russia is cautiously optimistic and a supporter of Chinese initiatives as they can be harmonised with its own initiative for Eurasian integration. Furthermore, China is an indispensable partner to Russia due to its capacity and intention to restructure the international economic system and usher in a more stable and balanced multipolar order. Albeit, Russia remains cautious about becoming excessively reliant on an asymmetrical economic partnership with China as it could undermine its political autonomy. Countries like Pakistan and Iran are supportive of China’s initiative as they benefit from both the economic opportunities and the geostrategic shift away from the Western-centric world order.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.